Italian pensioners sacrificed to ‘silence European bankers’

Looks like Italian pensioners will be sacrificed to pay for reckless lending by French banks to Greece. Or to “silence EU bankers”, as Carla Cantone from the CGIL trade union central put it in an interview with l’Unita newspaper today.

Cantone said plans apparently hammered out between Italian premier Silvio Berlusconi and Umberto Bossi, leader of coalition partner Northern League, to accelerate the timetable for increasing Italy’s pension age from 65 to 67, are not necessary and deeply unfair.

Indeed. Italians are already set to be working longer than the French and Germans, once reforms carried out under the administration of Lamberto Dini in 1994-5 kick in.

These reforms also decoupled the indexation of pensions from the cost of living, leading to a 35% cut in their value, according to the CGIL.

Today, four million pensioners live on Euros 500 (£434) a month and six million live on 750 euros. Hardly generous.

And what about the European Commission figures showing “out of control” Italian spending on pensions which by 2021 will amount to 14.1% of GDP, compared to 10.5% in Germany, 9.5% in Spain and 6.9% in the UK? Misleading.

Unlike other EU countries, the Italian figures include costs of early retirement linked company restructuring, according to economist Professor Roberto Pizzuti interviewed in communist daily Liberazione. The figures also include a severage fund (trattamento di fine rapporto – Tfr), which is made up purely of automatic deductions from Italian workers’ wages.

Coming on top of cuts to local health and social services that adversely affect the elderly, the changes Bossi and Berlusconi are proposing to keep the bankers and markets happy are, as the CGIL argues, not necessary and deeply unfair.

Is there anywhere else the Italian Government could plug the fiscal gap? Sure. Starting with Euros 120 billion a year in tax evasion and 60 billion a year estimated costs of corruption. If these two fiscal black holes were addressed, in ten years the entire Italian debt could be wiped out.

But of course, equally the Italian government could also come up with a few policies that promote growth, which in turn would cut the deficit – as well as help give jobs to the two million unemployed between the ages of 25-24.

This is the message the CGIL will be delivering when it holds a protest demonstration on 28 October to demand to demand an end to the Government’s “social butchery”, an end to cuts in welfare, health and pensions.